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U.S. Senators Call for Probe into Data Security Risks of Chinese AI Model DeepSeek

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A group of seven Republican U.S. senators led by Ted Budd urged the Commerce Department on Tuesday to investigate potential data security risks associated with Chinese open-source AI models such as DeepSeek.

The senators—including Jon Husted, Todd Young, John Cornyn, John Curtis, Bill Cassidy, and Marsha Blackburn—requested an assessment of whether applications using DeepSeek collect data that is transmitted back to Chinese servers, and if these AI models are sharing American personal or corporate information with China’s military or military-linked companies.

Their letter also sought information on any improper access by Chinese open-source models to export-controlled semiconductors or breaches of usage terms of U.S. AI models aimed at enhancing Chinese AI capabilities.

Bipartisan legislation has been proposed to ban DeepSeek’s use on federal government devices and networks, as well as prohibit its use by federal contractors in government projects.

Commerce Secretary Howard Lutnick stated in January that DeepSeek appeared to have misappropriated U.S. AI technology and promised to enforce restrictions. The Commerce Department did not immediately respond to requests for comment.

In June, Reuters reported that DeepSeek was assisting China’s military and intelligence services and was attempting to use Southeast Asian shell companies to obtain advanced semiconductors barred from shipment to China under U.S. export rules.

These developments underscore growing skepticism in Washington over DeepSeek’s rapid rise, with officials suggesting the Chinese firm’s AI prowess heavily depends on U.S. technology.

Based in Hangzhou, DeepSeek shocked the tech world in January by claiming its AI reasoning models matched or outperformed leading U.S. models at a fraction of the cost.

TikTok building U.S.-only app with separate algorithm and data systems

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TikTok is developing a standalone U.S. version of its platform, complete with a distinct algorithm and data system, to comply with U.S. legislation that mandates the divestment of its American operations. The project, internally known as “M2,” aims to meet a September deadline and could clear the path for a potential sale of TikTok’s U.S. business, Reuters reports, citing employees with direct knowledge.

The move involves duplicating TikTok’s codebase — including AI models, algorithms, features, and U.S. user data — from its global app to an independent U.S.-specific version. It is TikTok’s most ambitious technical separation effort to date and would represent the deepest structural divide between ByteDance’s U.S. and international operations. The U.S.-only version would function much like Douyin, TikTok’s China-specific app, and would not be visible to users outside the U.S.

The initiative responds to the 2024 law requiring ByteDance to divest TikTok or face a ban, amid long-standing U.S. concerns about data privacy and national security. While content from the current app is expected to carry over, the new recommendation engine will be trained solely on U.S. user data. This is expected to shift content visibility toward American creators and possibly limit international reach for non-U.S. influencers.

Sources revealed that since January, TikTok has been removing non-U.S. user data from Oracle’s American data centers to comply with separation demands. Meanwhile, ByteDance has worked on splitting its algorithm’s codebase — a move it previously denied.

If the technical split is completed, U.S. operations would be managed independently of TikTok’s global team, although ByteDance engineers might remain involved on a limited basis. This has raised internal questions about whether the U.S. algorithm will retain its effectiveness without access to ByteDance’s global engineering expertise.

A potential sale would involve a joint venture including American investors such as Susquehanna International Group, General Atlantic, KKR, and possibly Oracle, along with new players like Blackstone and Andreessen Horowitz. ByteDance would retain a minority stake. However, Beijing’s approval remains uncertain due to China’s export restrictions on recommendation algorithms, a key concern in the stalled 2020 negotiations.

The separation effort is unfolding against a broader backdrop of U.S.-China trade tensions. While former President Donald Trump said last week he would resume discussions with China over the sale, he admitted uncertainty over Beijing’s cooperation, adding, “I think the deal is good for China and it’s good for us.”

FCC Warns China Mobile of Potential Fines Over Non-Compliance in U.S. Probe

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The Federal Communications Commission (FCC) warned on Tuesday that it could impose fines on China Mobile for allegedly failing to cooperate with an investigation into whether its U.S. operations are circumventing American restrictions. The probe is part of a broader effort to ensure compliance with national security directives that have already barred several Chinese telecom firms from operating in the U.S.

According to the FCC, China Mobile has shown “misconduct” and “disregard” for regulatory authority by not providing the specific documents and information requested. The agency said the probe has been ongoing since November 2022, and that a supplemental request was sent in February this year. The company now has 30 days to comply before facing financial penalties.

Background and Concerns:

  • In 2019, the FCC determined that China Mobile was indirectly owned and controlled by the Chinese government, posing a national security risk due to the potential for cyber intrusions, espionage, and economic attacks.

  • The March 2024 probe includes nine Chinese companies, such as Huawei Technologies, ZTE, Hikvision, Dahua, China Telecom, and China Unicom Americas, all under suspicion of operating in ways that could sidestep U.S. bans.

  • FCC Chair Brendan Carr warned that some Chinese firms may be continuing operations under ambiguous interpretations of current restrictions.

Implications:

If China Mobile fails to respond within the specified timeframe, it may face escalating enforcement actions and monetary penalties, further straining U.S.-China technology and trade relations. The FCC’s stance signals increased vigilance in monitoring foreign telecom activity on U.S. soil, especially involving entities tied to state-backed ownership.

China Mobile has not yet issued a response.